Currency Outside Banks Drops To N3.66trn In July

Currency outside Nigeria’s banking system fell to N3.66 trillion in July 2024, marking the biggest drop this year and a 3.32 per cent decrease (N130 billion) from June’s figure of N3.79 trillion. This decline underscores the Central Bank of Nigeria’s (CBN) ongoing efforts to tighten liquidity and encourage more deposits into the formal banking sector.
Despite the decline in currency outside banks, the overall currency in circulation saw a slight increase from N4.05 trillion in June to N4.05 trillion in July, a growth of just 0.12 per cent. This minimal rise suggests economic stabilisation, possibly due to greater adoption of digital transactions and regulatory measures to control cash flow.
However, the share of currency outside banks dropped to 90.39 per cent (N3.66 trillion) of total currency in circulation, down from 93.59 per cent in June. This shift indicates that efforts to draw more money into the banking system are beginning to show results.
In June 2024, the currency in circulation exceeded N4 trillion for the first time, hitting N4.05 trillion, while currency outside banks reached a high of N3.79 trillion. However, July’s data shows a reversal, with more money flowing into banks, enhancing the CBN’s ability to implement effective monetary policies, manage inflation, and support economic stability.
This trend toward increased deposits suggests improved financial inclusion and a more controlled economy, with reduced risks of cash disruptions and better economic tracking.
The drop in currency outside the banking system aligns with a decline in Nigeria’s headline inflation rate, which fell to 33.40 per cent in July 2024 from 34.19 per cent in June, marking the first decrease since December 2022.
This shift highlights a positive trajectory toward stabilising the economy.